Senator LUDLAM (Western Australia) (17:41): I was quite enjoying Senator Heffernan's speech. I acknowledge that he is one of the few people in this parliament who has direct experience in this field. He also, I think, provides an important analysis that is largely lacking in what we get from the rest of the chamber. The only strong disagreement I had with Senator Heffernan's speech was with his faith that, if we go after the north, we will not simply make the same mistakes we have been making for 100 years. I think that difference is probably fairly well understood.

The other thing that Senator Heffernan said was that this bill is premature. I thought what we just heard from Senator Heffernan was a ringing endorsement of exactly why this bill should be brought on today and I will be sorry to see him sitting on the other side of the chamber when we come to a vote, because, with a few exceptions such as Senator Heffernan, all we hear is the polar opposite point of view. We heard that polar opposite view from our Western Australian colleague Senator Mark Bishop a little bit earlier on in the debate. He just waved his hands and said: 'This is all good. Sell off the country as rapidly as possible with as little consideration, as little oversight, as possible.' That is, perhaps, a rather brutal paraphrasing of Senator Bishop. There was nothing in that speech at all that paid regard to the concerns that we are bringing to the table. We see it in the mismanagement of the mining boom under successive governments and we see it in the way foreign acquisitions of agricult­ural land in Australia are handled.

I would like to congratulate Senators Milne and Xenophon for bringing this bill forward. It is not a barrier to free trade and it is not a barrier to foreign investment—that is not what we are proposing here. The bill seeks to implement some fairly common-sense changes to the legislative regime governing foreign acquisitions in this country—to strengthen protections of the national interest, to better define what we mean by that and to better equip legislators for decision making.

The major parties, apart from a few honourable exceptions, have not demon­strated any recognition at all of the challenges facing Australia with regard to investment by foreign entities or of the long-term problems that this parliament could face because other countries around the world are playing a longer game than us. The Chinese are playing a 100-year game. We are doing something completely different—we are governing in the interests of the next quarterly report or the next three-year electoral cycle. Other countries around the world are engaged in a deadly serious contest over resources, a contest to which Australia seems to simply insist on wearing a blindfold.

That is why it is important that we have the crossbenches, at least, putting some of these ideas into the public domain—there is precious little innovation coming from anywhere else. Foreign investment can have very positive economic effects, but with these come political consequences—they come with impacts on corporate governance, risks to competition and risks, perhaps most importantly, to food security. I think that each of these things should be strongly considered by the Foreign Investment Review Board before approvals for investments above a certain threshold are granted. Four per cent of our continent is considered good farming land and yet 45 million hectares of it has some level of foreign ownership. Eleven per cent of Australia's agricultural land has some level of foreign ownership and we cannot say where it is or what sectors it affects. One of the things that Senator Milne pointed out is that 31 per cent of Western Australia's water resources are foreign owned. I am simply raising something like that—a third of Western Australia's water resources, in the driest inhabited continent on the planet—to point out that perhaps we might want to introduce some kind of threshold test, some kind of mapping exercise, to work out who has bought it and where the ownership lies but we are accused of xenophobia. I find that counteraccusation absolutely offensive. This is not about xenophobia. It is about basic industry policy and good practice about knowing. If we are insisting on selling the farm, let us at least find out who we are selling it to.

The lack of information about the sectors affected is particularly problematic, because it opens up the possibility of a company or companies from one country completely dominating a particular section of Australian agriculture and cornering the market. Imagine if one foreign company or companies from one country owned, for example, all of Australia's banana plantations or all of Australia's orange groves. Without information about which farming land and what sectors of Australian agriculture are foreign owned, how can FIRB properly assess new investment proposals? How can we in this place and policy makers at all levels of government respond to growing foreign ownership without knowing where it is and what it entails? These are quite serious questions.

At the moment I think FIRB needs to monitor in particular a country's interest in specific sectors to make sure that various markets are not being cornered, to ensure that creeping acquisitions are not taking place which would quite negatively impact on our economy and on the ability of Australian companies to do business and employ Australians. According to Treasury, and this is something that I have spent a bit of time working on not necessarily just in the agricultural context, Australia's Foreign Investment Policy states:

The Government's approach to foreign investment policy is to encourage foreign investment consistent with community interests.

And:

The Government determines what is 'contrary to the national interest' by having regard to the widely held community concerns of Australians.

In 2008, the Treasurer released a set of six principles that are considered by FIRB in determining, on a case by case basis, whether particular investments by foreign governments and their agencies are consistent with Australia's 'national interest'. I will sketch what they are. FIRB needs to consider the following:

An investor's operations are independent from the relevant foreign government;

An investor is subject to and adheres to the law and observes common standards of business behaviour;

An investment may hinder competition or lead to undue concentration or control in the industry or sectors concerned;

An investment may impact on Australian Government revenue or other policies;

An investment may impact on Australia's national security;

An investment may impact on the operations and directions of an Australian business, as well as its contribution to the Australian economy and broader community.

They are so broadly framed that I think they leave an awful lot to be desired and they need to be stricter and more explanation needs to be given to each criterion to ensure that a sharper assessment is made of what we mean by Australia's 'national interest', rather than having this ideological assumption that all investment from anywhere at all is good without considering the strategic implications or some of the strategic plans that other countries who take a longer view of things are obviously putting into play.

Australian policy makers appear to have this innocent assumption that the market will provide and the market will look after us—and it will really won't. I think the guidelines should be incorporated into relevant legislation as to things like an investor's operations that are independent from the relevant foreign government. This is the issue that Senator Heffernan was speaking of: sovereign wealth funds or large industrial combines that are effectively owned and run by the Chinese government, to give just one example. They are playing a brand of capitalism different from what we play in Australia and from what we perhaps expect other countries to play.

The current threshold under which private foreign purchases of land in Australia need not be declared is an extraordinary $231 million. That is an enormous sum of money that can buy a vast amount of farming land. Until 1989 the threshold was $1 million. I know the cost of land has appreciated significantly since then, but not by 23,000 per cent. That has not been the increase. The threshold has, in fact, increased by 23,000 per cent if you take 1989 as your base year. That is an absurdly high threshold. It means we do not know what is going on. A foreign company or private citizen can purchase that much worth of farming land and then another and then another—ad nauseam—without the investments being declared or subject to a review by FIRB. So with these kinds of jigsaw acquisitions we are left in a position where enormous tracts of Australian farming land can be bought up.

Senator Milne pointed out, I think very strongly in her contribution to this debate, that this is not only an Australian problem necessarily; this is happening all over the world. Countries are looking just a little bit further down the kerb to see what food insecurity really means and are buying up farming land all over the world and essentially outsourcing their food-growing task. That is having serious implications on the food sovereignty of various countries around the world where access to decent food is simply not guaranteed. In Australia I think we do ourselves an enormous disservice by imagining that we should simply sit back and let this happen, as though we were some kind of Third World country with weak governance and no sense of strategy or industry policy. So I think one of the first things that we need is a lower cap on purchases not subject to declaration and review, to bring more of these acquisitions into question over some form of national interest test. We need data on foreign purchases of Australian farming land properly collated and retained and we need the weak guidelines to be strengthened and entrenched in law. New Zealand has a five-hectare threshold. Obviously, it is a smaller country but they have a five-hectare threshold and extensive data collation on foreign ownership of farm land. It has had no discernible detrimental impact on investment. That is the right thing for us to do now. It is the right thing to do for generations to come. This is not an anti-free-trade measure. This is a commonsense 'let's work out what's actually going on' measure. Our economic wellbeing and our food security absolutely depend on it.